HL made an error with SIPP but want money back

Beddie

Hoenir said:

Why didn't you contact them at the time of receiving the tax relief.  In addition kept this money aside retained as cash. Knowing that you weren't entitled to it. 

Many people do not log into their HL account every day/week/month, so they wouldn't necessarily know about the tax relief cash. When it arrives from HMRC there is no notification from HL - well I don't get one anyway.

Hoenir

Beddie said:

Hoenir said:

Why didn't you contact them at the time of receiving the tax relief.  In addition kept this money aside retained as cash. Knowing that you weren't entitled to it. 

Many people do not log into their HL account every day/week/month, so they wouldn't necessarily know about the tax relief cash. When it arrives from HMRC there is no notification from HL - well I don't get one anyway.

If you made a one off / ad-hoc payment would you not check that it had been correctly processed. Only takes a couple of minutes. 

EthicsGradient

Beddie said:

Hoenir said:

Why didn't you contact them at the time of receiving the tax relief.  In addition kept this money aside retained as cash. Knowing that you weren't entitled to it. 

Many people do not log into their HL account every day/week/month, so they wouldn't necessarily know about the tax relief cash. When it arrives from HMRC there is no notification from HL - well I don't get one anyway.

I think the point is "how did this cash obtained by error get invested?" If you don't log in, then you'd think it just sits there as cash, and could be used to repay the error. Unless HL allows you to set up a standing instruction "invest all the cash in my account each month, however much it is".

Beddie

EthicsGradient said:

Beddie said:

Hoenir said:

Why didn't you contact them at the time of receiving the tax relief.  In addition kept this money aside retained as cash. Knowing that you weren't entitled to it. 

Many people do not log into their HL account every day/week/month, so they wouldn't necessarily know about the tax relief cash. When it arrives from HMRC there is no notification from HL - well I don't get one anyway.

I think the point is "how did this cash obtained by error get invested?" If you don't log in, then you'd think it just sits there as cash, and could be used to repay the error. Unless HL allows you to set up a standing instruction "invest all the cash in my account each month, however much it is".

When you add money to your HL SIPP, e.g. £1000 into Fund A, they automatically invest the tax relief money they get from HMRC into the same fund. This happens a month or two later. 

Obviously the OP should have spotted this, but I can see how it could happen without noticing. The bigger issue was HL letting them think they could do a gross contribution, when clearly that isn't how they treated it. Sounds like crossed wires, just one of those mistakes that can happen in life.

Malthusian

Hoenir said:

If you made a one off / ad-hoc payment would you not check that it had been correctly processed. Only takes a couple of minutes. 

Punter mistakenly thinks they have made a gross contribution when they have actually ticked the box for a net one.

Punter checks their HL account a week after the payment, sees their gross contribution, and nothing else, and happily marks it off as "job done".

6-11 weeks later HL adds incorrectly claimed tax relief to the account.

Why would they check their account 2-3 months after they'd already verified that the job had been done correctly?

I have seen this happen before; in that case a contribution from a limited company's bank account was made, but the "personal contribution" box was ticked. Company pension contributions are made gross because they come out of money that the company hasn't yet paid corporation tax / dividend tax / etc tax on. Personal contributions come out of money you have already paid income tax on, so they are made net and have tax relief added on top. It's not clear whether that's happened in this case, as the OP hasn't answered the question of why they were making a gross contribution. 

In the old days when the contribution was accompanied by a lengthy application form that would have asked the member whether the contribution was coming from themselves or an employer, and would have been made by a cheque that would have given either a personal name or a limited company name as the accountholder, this mistake would have been a lot harder to make without being picked up. 

Now it is much easier to make, because everything is automatically done online without human intervention and the pension company may not see the name on the bank account (you'd think they would be required to know for anti-money laundering purposes, but apparently not). Progress.